When the markets began to unravel in September, it was a signal to the seasoned team at Brown Advisory to reach out to its lient base. These pros knew the drill. In times of stress, people want insight and guidance from someone they trust. So the Baltimore-based firm made certain it conveyed to clients what the turmoil meant to their portfolios.
"We are a net beneficiary of this market environment," says Richard Dumais, the trust and estate attorney recently named to head Brown Advisory's high-net-worth business. "We will set a record this year for new assets coming into the firm," he says.
Brown Advisory stood out in another way: While they were contacting clients, their competitors slept.
"Many prospects have told us their advisors are not communicating with them, be it a broker or investment advisory firm," Dumais says. "But in the high-net-worth business, communicating effectively with clients is extremely important. We've been getting positive feedback for how much we've been in touch during this very challenging period."
Standing in clients' shoes to proactively assess and address their needs is standard operating procedure at Brown Advisory, an independent shop with a staff of 200 and $15 billion under management that started in the early '90s as a tiny subsidiary of Alex. Brown & Sons, the legendary investment banking and brokerage house. It's an approach that has helped the firm, and its clients, withstand the market's recent historic ups and downs. The firm expects to reach a new record in new assets, which are running 25% ahead of last year and now total about $1 billion.
There are many paths to success in the advisory business. Deft delivery of comprehensive advice, innovative ways of working, strategically placed connections and solid investment performance have been the chief touchstones for Brown Advisory.
"We are an investment firm first," says CEO Michael D. Hankin. "If you walk around here, you'll hear people talking about making money and preserving capital. But we also have to be very good at client service and being strategic thinkers for our clients. At the core of our beginning was an effort to put together a team of people from different backgrounds-portfolio management, investment research, tax, trust and estate law, along with very talented administrative people-to think strategically for high-net-worth families."
When Hankin was hired in 1993 as the firm's second employee, one-stop financial-shopping for the ultra-affluent was hardly a proven marketing concept. Still, a need was sensed. Alex. Brown & Sons was for years a leader in the IPO underwriting business and cash-flushed executives from companies gone public-Oracle, Microsoft, Starbucks, AOL, et al-frequently asked the firm for help in managing their new fortunes. So did entrepreneurs who sold businesses through Alex. Brown's active M&A practice.
Current and former CEOs and business owners remain a significant portion of the firm's $10 billion private-client business. A typical client family might have an investable net worth of $20 million scattered across taxable accounts, retirement accounts and trusts. "These individuals are really dynamic, impressive people who raise the bar very high," Hankin says. "They challenge us to find creative ways of meeting their objectives."
Services available to these and other well-heeled clients through offices in Baltimore, Washington, D.C., New York and London include proprietary asset management, brokerage, philanthropic planning and fiduciary services, as well as access to a roster of outside managers specializing in alternatives and other asset classes.